A Voluntary Self Disclosure, otherwise known as a VSD, in the context of Federal Regulations, is a disclosure of information to the appropriate government agency that relates to potential violations of the regulations when the regulations and law carry civil or criminal liabilities for said violations.
A VSD should be considered anytime there has been a significant potential that a violation of the applicable Statutes or Regulations has occurred.
A VSD typically exists in the context of an export. Particularly, in a Defense related product, information or service wherein the United States has a national security interest in protecting.
The most typical VSDs involve “exports” which occur when protected defense-related information is disclosed to a non-U.S. person. Indeed, when such information is disclosed to a non-U.S. person, even if the U.S. person resides inside of the United States, the regulations still deem it as an export. Typical violations occur when an employee of a United States company was a work visa but is not a U.S. citizen.
If a company discovers that an improper export of information or product has occurred, it must next evaluate and classify the information which has been divulged and determine if the violation should be self-reported. This evaluation is typically done by International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), U.S. Customs & Border Protection (CBP) or Bureau of Industry and Security (BIS) attorneys or consultants who have extensive experience working with the Directorate of Defense Trade Controls (DDTC).
An attorney can help your company ascertain the extent of the violation and if it is determined that the violation should be reported, an attorney can help reduce the civil liability and criminal exposure by presenting the relevant mitigating factors in a light most favorable to the company’s interests. Moreover, a VSD, is in and of itself, a mitigating factor which most often results in the avoidance of criminal liability and reduces the financial exposure as well.
Export compliance law and navigating through the ITAR, EAR, CBP and DDTC regulatory environment can be complex and stressful. Let our law firm assist you with your compliance need and schedule a confidential legal consultation with Maurice Arcadier, Esq. to assess your needs.